we are a construction co, we had purchased flexboard, denoting safety instructions at site , please advice as to under which head it should be booked
Jitendra Vyas
(Commercial Officer)
(178 Points)
Replied 16 February 2012
Fixed Assets. if for long time use at site.
Ashish
(XYZ)
(86 Points)
Replied 16 February 2012
This should be capitalied and shown under Fixed Assets
manik
(ca in practice)
(420 Points)
Replied 16 February 2012
but these are made of plastic sheets , suspectable to wear and tear, how could these be capitalised and its cost is rs.5500
Phalgun
(Audit Manager)
(327 Points)
Replied 16 February 2012
under the Income tax act, there is a provision stating that a fixed asset worth Rs.5000 or less be depreciated @ 100%. since this is small amount u can show it as direct expense.
Jitesh Golani
(student)
(60 Points)
Replied 16 February 2012
Agree with Falgun, even if it above Rs. 5000 still you can treat it is revenue expenditure...
Anshul
(CA Final Aspirant)
(42 Points)
Replied 16 February 2012
Agreed.....It shall be treated as a revenue expenditure only. Moresoever , a Flex board would also not have a long life...
khushal
(ACA; CS Professional Gr. II & IV Cleared; Pursuing ACCA UK & Bcom Graduate)
(63 Points)
Replied 16 February 2012
| Originally posted by : Phalgun | ||
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under the Income tax act, there is a provision stating that a fixed asset worth Rs.5000 or less be depreciated @ 100%. since this is small amount u can show it as direct expense. |
 |
Fully Agree with this .
Tony John
(Chartered Accountant)
(6085 Points)
Replied 17 February 2012
| Originally posted by : Jitesh Golani | ||
|
|
Agree with Falgun, even if it above Rs. 5000 still you can treat it is revenue expenditure... |
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Dhanabal Ramasamy
(CHARTERED ACCOUNTANT)
(105 Points)
Replied 18 February 2012
Dear Friends..
Items below Rs.5000/- can be fully allowed as depreciation as per Companies Act and not in Income Tax Act.
In this case,its revenue expenditure. Its not asset though it serve long year. We might have heard or studied about "deffered revenue expenditure" and it belongs to such category. For example take purchase of stationery like File, Folder.. is it asset or Revenue Expenditure? Like that its a revenue expenditure and to be expensed in same year.
CA Ashish Lodha
(Chartered Accountant)
(184 Points)
Replied 18 February 2012
It shouldn't be capitalized & charged to revenue account.
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